Poland digs its heels in over 15% global tax accord for multinationals

American Chamber of Commerce Ireland hosts Business Roundtable with US Treasury Secretary Janet Yellen and Finance Minister Paschal Donohoe last November.

Poland is digging in its heels in a standoff with the EU and the US over a global minimum tax for corporations, saying it wants a legal guarantee to ensure multinational companies leave more in countries where they generate revenue.

Finance Minister Magdalena Rzeczkowska told Bloomberg the global deal would force Poland to change the way it lures foreign investors – by offering tax breaks. 

To compensate for this, the EU’s lone holdout for the deal wants to be certain the global minimum levy will be accompanied by tax changes for digital giants.

“For years, Poland has been pursuing a fiscal policy aimed at attracting investments in innovation and new technologies by offering tax reliefs and incentives for investors,” Ms Rzeczkowska said in an interview. 

“It’s our main weapon and our advantage,” she said.

The Irish Government last autumn formally signed up to the deal after initially pushing back.”

Warsaw’s policy is further endangering the implementation of a global deal heralded as a revolution to create a fairer corporate tax system. 

US Treasury Secretary Janet Yellen tried and failed to convince Polish officials to drop their opposition during a trip to Warsaw last month.

Poland is blocking the measure, which would implement a 15% minimum corporate tax rate across the EU – part of an agreement backed in principle by almost 140 countries, including Poland, last October. 

EU directives must be backed unanimously by member countries.

Warsaw wants implementation of the minimum levy to be legally tied to the other part of the global deal known as the first pillar, which aims to give governments more rights to tax the local operations of the world’s largest companies. 

But the technical work on the required international treaty mechanism for the first pillar is delayed by uncertainty whether the US Congress would ultimately back it. 

- Bloomberg